Abstract
In today’s uncertain and challenging business environment, firms face constantly changing stakeholder demands. As a result, continuous innovation is required, making the design and use of management control systems (MCS) that foster innovation an important managerial issue. Simons’ Levers of Control (LOC) is famous in MCS’s conceptual framework. Meanwhile, prior research suggests that psychological safety, which is defined as a shared belief that the team is safe for interpersonal risk taking, facilitates learning behaviour and creativity within teams. Building on these insights, this study discusses how MCS influences the cultivation of psychological safety within the organisation and the expression of creativity by employees in the innovation creation process under challenging business environments. Through a review of prior studies on MCS and psychological safety, this study develops hypotheses regarding the relationship between the LOC framework and psychological safety.